Gold is increasingly chosen by investors as a safe haven amidst trade tensions, while Bitcoin fails to show the expected growth.
Status of Gold and the Crypto Market
Reports indicate that the ratio between Bitcoin’s dollar price and gold’s per ounce price has fallen to 34. This ratio, which once reached previous highs, has seen a decline of approximately 15.4% from the December peak above 40. The data reveals that volatility in the cryptocurrency market is narrowing compared to the gold market. Gold has experienced an increase of around 10% since the beginning of the year, reaching a level of $2,877 per ounce. This increase is attributed to concerns regarding trade disputes between the U.S. and China, alongside investors’ tendency to avoid risk.
U.S.-China Trade Tensions and Safe Haven Demands
Trade disputes, tariffs, and global uncertainties are increasing the demand for gold, reflecting pressure on investors. The tension between the U.S. and China is contributing to the rising demand in the gold market. The threat of tariffs has caused gold futures prices to exceed spot prices. Large banking institution JPMorgan announced plans to deliver $4 billion in gold bullion to New York this month. This development reinforces the perception of gold as a safe haven. Investments in ETFs traded in the U.S. are influenced by technical arbitrage operations, as Markus Thielen noted, indicating that simultaneous spot or futures sales could balance ETF purchases.
Market developments are impacting investor behavior based on volatility across different asset classes and global tensions. While the preference for gold as a safe haven continues, fluctuations in Bitcoin and ETF trading volumes are noteworthy.
